Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Short Squeeze Play Underway


Long in the tooth, eh?


The current uptrend has taken its toll on short sellers. This month's short interest reports from the various exchanges show that as of the trade date of July 12th, short intensity levels have dipped to moderate levels. Moreover, it is reasonable to contemplate that more short covering has occurred since then given the uptrending price action.

In our Type 2 list (strong price action but light short intensity) we find names such as EBAY, BRCM, GNSS, QCOM, GOOG, ALTR, BIIB, GENZ, SPLS. In our Type 4 list (weak price action and light short intensity) we find names such as ERTS, SBUX, CSCO, INTC, LRCX, JNPR, DISH, QLGC, EWBC, LPNT, GILD, DLTR, ESRX, ROST, SINA, SYMC. Most of these symbols are poster children for momentum followers.

The above chart shows our electronic technology index. Electronic technology is our third best ranked sector, however short intensity is starting to fall. Such dips in short selling are part of the "advance" process as shorts are squeezed out. The more shorts disappear, the more mature the advance phase. There remains 17% of electronic technology under "short squeeze" pressure - a healthy number. One concern is that positive seasonality has run its course. There is a secondary seasonal peak in August, in line with the August seasonal peak of our 20-year seasonal cycle.

We want to give the current advance phase as much chance to perform as possible. However, the bull is getting a bit long in the tooth. We will continue recommend pruning long positions over the next month as the market advances, and await signs of price weakness to initiate additional short positions.

< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos